We recently reported the use of a biphasic approach to generate topologically segregated bilayer beads. In generating 'one-bead one-compound' (OBOC) combinatorial libraries, novel encoding methods have been applied to these beads such as the testing library compound and the coding tags residing on the outer layer and inner core of each bead, respectively. In this report, we further exploit these bilayer beads by preparing target bead-libraries with low concentration of random peptides on the outer layer, and full substitution of coding peptides in the bead interior. The low concentration of peptide on the bead surface enables us to greatly increase the stringency of screening so that higher affinity ligands can easily be identified. Full substitution of the inner core of the beads enables us to have enough coding peptides inside the bead for direct microsequencing with Edman chemistry. The biphasic approach of preparing bilayer beads can be carried out at any point during the library construction. Therefore, the nonsequencable or fixed structures of the peptides can be bypassed in the coding tags. As a result, peptide libraries that otherwise cannot be sequenced can now be sequenced, and peptide segments with fixed residues within the libraries can be bypassed so that the microsequencing time can be significantly shortened. Furthermore, peptides with a branch of random sequence in the middle of a fixed peptide chain can be encoded with just the random sequence in the bead interior. We have successfully applied these novel OBOC library concepts in the optimization of cell-surface ligands for a human T-cell leukemia, Jurkat, cell line.